Nintendo Explains What Makes a Game Developer Worth Acquiring

Acquiring third party development studios is a key component for success in the current gaming industry. Nintendo, however, has consistently showed its hesitation to acquire new studios.

In the last 10 years alone Microsoft have made just shy of 100 acquisitions in the name of building a strong company. Sony have also made roughly 30 acquisitions in the last 10 years. Nintendo, however, made none. This changed in January this year, when Nintendo made the decision to acquire Canadian company, Next Level Games who are behind the recent Luigi’s Mansion games. The company’s first collaboration with Nintendo occurred all the way back in 2005 with an arcade-style soccer title called Super Mario Strikers. Before this acquisition, Nintendo’s most recent purchase of a game developer occurred in 2007 with Monolith Soft, the creators of Xenoblade Chronicles.

Now, in a recent interview Nintendo’s current president, Shuntaro Furukawa, has revealed what the company looks for in a game developer. On the matter Furukawa said they will not “blindly acquire" development studios. The president continued to add that he does not believe “scaling up” Nintendo will “increase the value of entertainment” they offer. Regarding its latest acquisition, Furukawa described it as a practicality for both studios. The decision was made so they could “work together to improve the quality and speed of development.” The interview revealed that Nintendo are only interested in acquiring studios if it will enhance the gameplay experience they offer.

Nintendo’s description of the way they decide to acquire studios is interesting when compared to other monoliths in the gaming industry. Both Microsoft and Sony have made it an integral part of their business plan to acquire new talent and it's easy to see why. Acquiring new studios means not only more resources towards first party development, but the promise of more exclusives. Developer Insomniac Games once released games for a variety of platforms such as Sunset Overdrive for the Xbox One. However, since Insomniac's acquisition by Sony in 2019, the studio has only released PlayStation exclusives. While acquiring new talent is a sound business plan to ensure a monopoly over the gaming industry, Nintendo seems to have gone a different route.

It is interesting to get a glimpse into the reality of Nintendo’s acquisition decisions. The company is often criticized for its not-so-consumer-friendly practices. This makes its refusal to acquire studios to buy out their competition somewhat unexpected. Many fans will likely see this news as reassurance that Nintendo stands for its followers’ best interests.

However, Nintendo arguably has the strongest first-party intellectual property among any of the participants in the console wars. Considering this, it is understandable why the studio feels secure with its existing exclusives.

On January 5, Nintendo announced it planned on acquiring Next Level Games, a Canadian-based developer that had been working closely alongside the company for the past decade. Next Level Games' most recent release, Luigi's Mansion 3, has been a huge sales success for Nintendo and earned a great deal of critical acclaim as well, so it makes sense for Nintendo to bring the studio into the fold in an official capacity.